9 AN ACT relating to pensions; concerning tax exempt status thereof;
10 amending K.S.A. 14-10a10, 74-4978g and 74-49,106 and K.S.A. 1998
11 Supp. 12-111a, 12-5005, 13-14a10 and 74-4923 and repealing the ex-
12 isting sections.
13
14 Be it enacted by the Legislature of the State of Kansas:
15 Section 1. K.S.A. 1998 Supp. 12-111a is hereby amended to read as
16 follows: 12-111a. Except as provided further, all annuities, pensions and
17 benefits paid, which arise from services of a policeman or fireman, by a
18 pension and benefit plan of a city of the first or second class under a
19 charter ordinance related to K.S.A. 13-14a01 et seq. or K.S.A. 14-10a01
20 et seq., and amendments thereto, and any identifiable proceeds therefrom
21 in an individual retirement account or annuity qualified under section
22 408 of the federal internal revenue code of 1986, as amended are hereby
23 made and declared exempt from any tax of the state of Kansas or any
24 political subdivision or taxing body thereof and shall not be subject to
25 execution, garnishment or attachment. Any pension benefit or annuity
26 accruing to services of a policeman or fireman by a charter ordinance
27 under this section shall not be exempt from claims of an alternate payee
28 under a qualified domestic relations order. As used in this section, the
29 terms "alternate payee" and "qualified domestic relations order" shall
30 have the meaning ascribed to them in section 414(p) of the United States
31 internal revenue code of 1954, as amended. The provisions of this section
32 shall apply to any qualified domestic relations order which is in effect on
33 or after July 1, 1994.
34 Sec. 2. K.S.A. 1998 Supp. 12-5005 is hereby amended to read as
35 follows: 12-5005. (a) Every retired member of a local police or fire pen-
36 sion plan and every active member of the plan who is entitled to make
37 an election to become a member of the Kansas police and firemen's re-
38 tirement system pursuant to K.S.A. 12-5003 or 74-4955 and amendments
39 thereto and who does not so elect shall become a special member of the
40 Kansas police and firemen's retirement system on the entry date of the
41 city which is affiliating with the Kansas police and firemen's retirement
42 system with regard to all active members and retired members of the
43 local police or fire pension plan under K.S.A. 74-4954 and amendments

HB 2297

2

1 thereto.
2 (b) Beginning with the first payroll for services as a policeman or
3 fireman after an active member of a local police or fire pension plan
4 becomes a special member of the Kansas police and firemen's retirement
5 system under this section, the city shall deduct from the compensation
6 of each special member the greater of 7% or the percentage rate of con-
7 tribution which the active member was required to contribute to the local
8 police or fire pension plan preceding the entry date of the city, as em-
9 ployee contributions. The deductions shall be remitted quarterly, or as
10 the board of trustees otherwise provides, to the executive secretary of the
11 Kansas public employees retirement system for credit to the Kansas pub-
12 lic employees retirement fund. All deductions shall be credited to the
13 special members' individual accounts beginning on July 1 of the year
14 following the entry date of the city for purposes of all active and retired
15 members of the local police and fire pension plan.
16 (c) Except as otherwise provided in this act, each active member of
17 a local police or fire pension plan who becomes a special member of the
18 Kansas police and firemen's retirement system under this section shall be
19 subject to the provisions of and entitled to pensions and other benefits,
20 rights and privileges to the extent provided under the local police and fire
21 pension plan on the day immediately preceding the entry date of the city
22 which is affiliating with the Kansas police and firemen's retirement system
23 with regard to all active members and retired members of the plan.
24 (d) Each retired member of a local police or fire pension plan who
25 becomes a special member of the Kansas police and firemen's retirement
26 system under this section shall be entitled to receive from the Kansas
27 police and firemen's retirement system a pension or any other benefit to
28 the same extent and subject to the same conditions as existed under the
29 local police or fire pension plan on the day immediately preceding the
30 entry date of the city which is affiliating with the system with regard to
31 all active members and retired members of the plan under K.S.A. 74-
32 4954 and amendments thereto, except no retired special member shall
33 be appointed in or to a position or office for which compensation is paid
34 for service to the same state agency, or the same police or fire department
35 of a city, township, special district or county or the same sheriff's office
36 of a county. This subsection shall not apply to service rendered by a
37 retiree as a juror, as a witness in any legal proceeding or action, as an
38 election board judge or clerk or in any other office or position of a similar
39 nature. However, all such benefits paid shall be paid in accordance with
40 the applicable requirements under section 401 (a)(9) of the federal in-
41 ternal revenue code of 1986 as applicable to governmental plans, as in
42 effect on July 1, 1998, and the regulations thereto, as in effect on July 1,
43 1998. Any retiree employed by a participating employer in the Kansas

HB 2297

3

1 police and firemen's retirement system shall not make contributions or
2 receive additional credit under the system for that service. This subsec-
3 tion, except as it relates to contributions and additional credit, shall not
4 apply to the employment of any retiree by the state of Kansas, or any
5 county, city, township, special district, political subdivision or instrumen-
6 tality of any one or several of the aforementioned for a period of not
7 exceeding 30 days in any one calendar year.
8 (e) (1) Every pension or other benefit received by any special mem-
9 ber pursuant to subsection (c) or (d) and any identifiable proceeds there-
10 from in an individual retirement account or annuity qualified under sec-
11 tion 408 of the federal internal revenue code of 1986, as amended is hereby
12 made and declared exempt from any tax of the state of Kansas or any
13 political subdivision or taxing body of this state; shall not be subject to
14 execution, garnishment, attachment or any other process or claim what-
15 soever, except such pension or benefit or any accumulated contributions
16 due and owing from the system to such special member are subject to
17 decrees for child support or maintenance, or both, as provided in K.S.A.
18 60-1610 and amendments thereto; and shall be unassignable, except that
19 within 30 days after the death of a retirant the lump-sum death benefit
20 payable to a retirant pursuant to the provisions of K.S.A. 74-4989 and
21 amendments thereto may be assignable to a funeral establishment pro-
22 viding funeral services to such retirant by the beneficiary of such retirant.
23 The Kansas public employees retirement system shall not be a party to
24 any action under article 16 of chapter 60 of the Kansas Statutes Anno-
25 tated, and amendments thereto, and is subject to orders from such actions
26 issued by the district court of the county where such action was filed.
27 Such orders from such actions shall specify either a specific amount or
28 specific percentage of the amount of the pension or benefit or any ac-
29 cumulated contributions due and owing from the system to be distributed
30 by the system pursuant to this act.
31 (2) Every pension or other benefit received by any special member
32 pursuant to subsection (c) or (d) and any identifiable proceeds therefrom
33 in an individual retirement account or annuity qualified under section
34 408 of the federal internal revenue code of 1986, as amended is hereby
35 made and declared exempt from any tax of the state of Kansas or any
36 political subdivision or taxing body of this state; shall not be subject to
37 execution, garnishment, attachment or any other process or claim what-
38 soever, except such pension or benefit or any accumulated contributions
39 due and owing from the system to such special members are subject to
40 claims of an alternate payee under a qualified domestic relations order.
41 As used in this subsection, the terms "alternate payee" and "qualified
42 domestic relations order" shall have the meaning ascribed to them in
43 section 414(p) of the federal internal revenue code of 1986, as in effect

HB 2297

4

1 on July 1, 1998. The provisions of this subsection shall apply to any qual-
2 ified domestic relations order which is in effect on or after July 1, 1994.
3 (f) (1) Subject to the provisions of K.S.A. 1998 Supp. 74-49,123 and
4 amendments thereto, each participating employer, pursuant to the pro-
5 visions of section 414(h)(2) of the federal internal revenue code of 1986,
6 as in effect on July 1, 1998, shall pick up and pay the contributions which
7 would otherwise be payable by members as prescribed in subsection (b)
8 commencing with the third quarter of 1984. The contributions so picked
9 up shall be treated as employer contributions for purposes of determining
10 the amounts of federal income taxes to withhold from the member's
11 compensation.
12 (2) Member contributions picked up by the employer shall be paid
13 from the same source of funds used for the payment of compensation to
14 a member. A deduction shall be made from each member's compensation
15 equal to the amount of the member's contributions picked up by the
16 employer, provided that such deduction shall not reduce the member's
17 compensation for purposes of computing benefits under K.S.A. 12-5001
18 to 12-5007, inclusive, and amendments thereto.
19 (3) Member contributions picked up by the employer shall be re-
20 mitted quarterly, or as the board may otherwise provide, to the executive
21 secretary for credit to the Kansas public employees retirement fund. Such
22 contributions shall be credited to a separate account within the member's
23 individual account so that amounts contributed by the member com-
24 mencing with the third quarter of 1984 may be distinguished from the
25 member contributions picked up by the employer. Interest shall be added
26 annually to members' individual accounts.
27 Sec. 3. K.S.A. 1998 Supp. 13-14a10 is hereby amended to read as
28 follows: 13-14a10. Except as provided further, any annuity, benefits,
29 funds, property or rights created by or accruing to any person under the
30 provisions of K.S.A. 13-14a01 et seq. or K.S.A. 14-10a01 et seq., and
31 amendments thereto, and any identifiable proceeds therefrom in an in-
32 dividual retirement account or annuity qualified under section 408 of the
33 federal internal revenue code of 1986, as amended are hereby made and
34 declared exempt from any tax of the state of Kansas or any political sub-
35 division or taxing body thereof, and shall not be subject to execution,
36 garnishment or attachment, or any other process or claim whatsoever,
37 and shall be unassignable, except as specifically provided by law.
38 Any pension benefits or annuities accruing under the provisions of
39 K.S.A. 13-14a01 et seq. or K.S.A. 14-10a01 et seq., and amendments
40 thereto, shall not be exempt from claims of an alternate payee under a
41 qualified domestic relations order. As used in this section, the terms "al-
42 ternate payee" and "qualified domestic relations order" shall have the
43 meaning ascribed to them in section 414(p) of the federal internal reve-

HB 2297

5

1 nue code of 1986, as in effect on July 1, 1998. The provisions of this
2 section shall apply to any qualified domestic relations order which is in
3 effect on or after July 1, 1994.
4 Sec. 4. K.S.A. 14-10a10 is hereby amended to read as follows: 14-
5 10a10. Any annuity, benefits, funds, property, or rights created by or
6 accruing to any person under the provisions of K.S.A. 13-14a01 et seq. or
7 K.S.A. 14-10a01 et seq. and any acts amendatory thereof or supplemental
8 theretoamendments thereto, and any identifiable proceeds therefrom in
9 an individual retirement account or annuity qualified under section 408
10 of the federal internal revenue code of 1986, as amended are hereby made
11 and declared exempt from any tax of the state of Kansas or any political
12 subdivision or taxing body thereof, and shall not be subject to execution,
13 garnishment, or attachment, or any other process or claim whatsoever,
14 and shall be unassignable, except as specifically provided by law.
15 Sec. 5. K.S.A. 1998 Supp. 74-4923 is hereby amended to read as
16 follows: 74-4923. (a) No alteration, amendment or repeal of this act shall
17 affect the then existing rights of members and beneficiaries but shall be
18 effective only as to rights which would otherwise accrue under this act as
19 a result of services rendered by an employee after the alteration, amend-
20 ment or repeal. This subsection shall not apply to any alteration or amend-
21 ment of this act which provides greater benefits to members or benefi-
22 ciaries, but any increase of benefits shall only be applicable to benefits
23 payable on the first day of the month coinciding with or following the
24 effective date of the alteration or amendment.
25 (b) Any annuity, benefits, funds, property or rights created by, or
26 accruing to any person under the provisions of K.S.A. 74-4901 et seq. or
27 74-4951 et seq., and amendments thereto, and any identifiable proceeds
28 therefrom in an individual retirement account or annuity qualified under
29 section 408 of the federal internal revenue code of 1986, as amended shall
30 be exempt from any tax of the state of Kansas or any political subdivision
31 or taxing body of the state; shall not be subject to execution, garnishment
32 or attachment, or, except as otherwise provided, any other process or
33 claim whatsoever; and shall be unassignable, except that within 30 days
34 after the death of a retirant the lump-sum death benefit payable to a
35 retirant's beneficiary pursuant to the provisions of K.S.A. 74-4989 and
36 amendments thereto may be assignable to a funeral establishment pro-
37 viding funeral services to the retirant by the beneficiary of such retirant.
38 Any annuity or benefit or accumulated contributions due and owing to
39 any person under the provisions of K.S.A. 74-4901 et seq. or 74-4951 et
40 seq. and amendments thereto are subject to claims of an alternate payee
41 under a qualified domestic relations order. As used in this subsection, the
42 terms "alternate payee" and "qualified domestic relations order" shall
43 have the meaning ascribed to them in section 414(p) of the federal in-

HB 2297

6

1 ternal revenue code. The provisions of this act shall apply to any qualified
2 domestic relations order which is in effect on or after July 1, 1994. The
3 Kansas public employees retirement system shall not be a party to any
4 action under article 16 of chapter 60 of the Kansas Statutes Annotated,
5 and amendments thereto, but is subject to orders from such actions issued
6 by the district court of the county where such action was filed and may
7 also accept orders which it deems to be qualified under this subsection
8 from courts having jurisdiction of such actions outside the state of Kansas.
9 Such orders from such actions shall specify either a specific amount or
10 specific percentage of the amount of the pension or benefit or any ac-
11 cumulated contributions due and owing from the system to be distributed
12 by the system pursuant to this act.
13 (c) In any case where a state agency is owed a debt or where a par-
14 ticipating employer under the Kansas public employees retirement sys-
15 tem or under the Kansas police and firemen's retirement system has been
16 required to pay and has paid an arrearage obligation of the amount of
17 contributions of a member which were not paid at the time required and
18 where the employment of the member by the state agency or participating
19 employer has been terminated and the member is eligible to withdraw
20 accumulated contributions in accordance with K.S.A. 74-4917 and 74-
21 4963, and amendments thereto, the state agency or participating em-
22 ployer shall be paid from the member's account in the fund an amount
23 equal to the debt or the amount of contributions of the member paid by
24 the participating employer pursuant to an arrearage obligation, upon ap-
25 plication to the board therefor accompanied by certification of the
26 amount to be paid to the state agency or participating employer. If any
27 application and certification under this subsection are not received by the
28 board prior to the withdrawal of accumulated contributions by the mem-
29 ber, the board shall not be liable to pay and shall not pay any amount
30 from the fund pursuant to any such application and certification.
31 Sec. 6. K.S.A. 74-4978g is hereby amended to read as follows: 74-
32 4978g. Any person receiving or entitled to receive a pension or any other
33 benefit, or who will become entitled to receive a pension or any other
34 benefit, from the state highway patrol pension fund as it existed prior to
35 April 1, 1972, shall be entitled to receive from the Kansas police and
36 firemen's retirement system such pension or any other benefit to the same
37 extent and subject to the same conditions as existed on April 1, 1972. Any
38 minor child of a member of the state highway patrol pension system or
39 special member of the Kansas police and firemen's retirement system
40 who died by reason of injuries received or disease contracted by such
41 member while in the performance of such member's duties as a member
42 of the highway patrol and whose spouse's pension was terminated because
43 of such spouse's remarriage shall receive a monthly amount equal to the

HB 2297

7

1 pension which was terminated due to such remarriage. Such benefits shall
2 accrue from April 1, 1973, or the date of the spouse's remarriage, which-
3 ever is later and shall be terminated on the first day of the month in which
4 the child dies, marries or attains the age of 18 years or in which the child
5 attains the age of 23 years, if such child is a full-time student as provided
6 in K.S.A. 74-49,117, and amendments thereto. All pensions and benefits
7 received by any person under this act and any identifiable proceeds there-
8 from in an individual retirement account or annuity qualified under sec-
9 tion 408 of the federal internal revenue code of 1986, as amended are
10 hereby made and declared exempt from any tax of the state of Kansas or
11 any political subdivision or taxing body thereof, and shall not be subject
12 to execution, garnishment, or attachment, or any other process or claim
13 whatsoever.
14 Sec. 7. K.S.A. 74-49,106 is hereby amended to read as follows: 74-
15 49,106. (a) Each person who is a special member of the Kansas public
16 employees retirement system under subsection (c) of K.S.A. 74-4999, and
17 amendments thereto, shall be entitled to receive from the Kansas public
18 employees retirement system a retirement benefit, annuity, pension or
19 other benefit to the same extent and subject to the same conditions as
20 existed under the laws in effect on the day immediately preceding the
21 effective date of this act, except that each person who is a special member
22 of the Kansas public employees retirement system pursuant to subsection
23 (c) of K.S.A. 74-4999, and amendments thereto, shall have such person's
24 retirement benefit, annuity, pension or other benefit recalculated under
25 subsection (c) of K.S.A. 74-49,104, and amendments thereto. If such re-
26 calculation results in an increase in such special member's retirement
27 benefit, annuity, pension or other benefit, such increase shall accrue and
28 be payable to such special member on and after July 1, 1982.
29 (b) Every retirement benefit, annuity, pension or other benefit re-
30 ceived by any person pursuant to subsection (a) and any identifiable pro-
31 ceeds therefrom in an individual retirement account or annuity qualified
32 under section 408 of the federal internal revenue code of 1986, as amended
33 shall be exempt from any tax of the state of Kansas or any political sub-
34 division or taxing body of the state; shall not be subject to execution,
35 garnishment, attachment or any other process or claim whatsoever, in-
36 cluding decrees for support or maintenance; and shall be unassignable.
37 Sec. 8. K.S.A. 14-10a10, 74-4978g and 74-49,106 and K.S.A. 1998
38 Supp. 12-111a, 12-5005, 13-14a10 and 74-4923 are hereby repealed.
39 Sec. 9. This act shall take effect and be in force from and after its
40 publication in the statute book.